At the Canadian Water Network conference we heard that it is estimated that 800 million people don't have access to clean drinking water and 41 percent of the world’s population, 2.3 billion people, live in water-stressed areas. Cash-stressed governments are increasingly being forced to turn to the private sector to fund the construction and maintenance of water networks. But estimating the cost of producing freah water is difficult because of such things as entitlement typically involving givernment subsidies.
At the conference Geoff Riggs from IBM mentioned a joint Waterfund LLC and IBM project that was signed in January of this year to develop a Water Cost Index (WCI). This will use IBM's big data analytics technology to analyze data from sensors and smart meters as well as large and diverse unstructured data sets to estimate unsubsidized cost of freshwater production in different regions around the world. Index values will reflect estimated water production costs measured in US dollars per cubic metre for a variety of major global water infrastructure projects ranging from retail water utilities and wholesale water utilities to major transmission projects.
It is estimated that the backlog of investment in water systems around the world is about $1 trillion, and this does not include the 800 milllion people that currently don't have access to clean water. The idea is that the WCI will provide a financial tool will make it easier for private investors to estimate costs and returns of water infrastructure investment.